BILL NUMBER: SB 940	CHAPTERED  10/10/99

	CHAPTER   884
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 9, 1999
	PASSED THE SENATE   SEPTEMBER 9, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   AUGUST 24, 1999
	AMENDED IN ASSEMBLY   AUGUST 16, 1999
	AMENDED IN ASSEMBLY   JULY 1, 1999
	AMENDED IN SENATE   APRIL 5, 1999

INTRODUCED BY   Senator Speier

                        FEBRUARY 25, 1999

   An act to amend Section 12978 of, and to add and repeal Sections
1872.81 and 1874.8 of, the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 940, Speier.  Insurers:  fees.
   Existing law requires each insurer doing business in this state to
pay an annual fee not to exceed $1 for each vehicle it insures, in
order to fund increased investigation and prosecution of fraudulent
automobile insurance claims and economic automobile theft.  Revenues
from the fee are available for distribution by the Insurance
Commissioner to the Bureau of Fraudulent Claims of the Department of
Insurance, to the Department of the California Highway Patrol, and to
district attorneys, as specified.
    This bill would require each insurer, until January 1, 2007, to
pay an additional annual fee of 30
for each vehicle it insures to fund certain consumer operations of
the Department of Insurance related to automobile insurance.  This
bill would also require the department to report to the Legislature's
insurance committees on plans for use of the new revenues and on the
opportunities for improving the fraud programs funded by the
existing revenues, as specified.  r   This bill would also require
each insurer, until January 1, 2007, to pay an additional annual fee,
not to exceed 50
, for each vehicle it insures, to fund the Bureau of Fraudulent
Claims and an Organized Automobile Fraud Activity Interdiction
Program.      Existing law establishes various fees to be charged by
the Department of Insurance in connection with its licensing and
regulatory activities relating to the business of insurance.
Existing law authorizes the Insurance Commissioner to increase or
decrease those statutory fees according to a specified procedure, and
establishes limitations on the amount that fees may be increased or
decreased.
   This bill would require the department to annually project forward
its workload for the subsequent 3 years in order to project
appropriate fee levels, and to annually make adjustments to those
fees, if necessary, based on actual workload experience.
   Existing law also provides that any increase or decrease in those
statutory fees shall be by a uniform percentage for all fees, rounded
to the nearest whole dollar.
   This bill would delete that provision.
   This bill would provide that its provisions would become operative
only if AB 1050 of the 1999-2000 Regular Session is enacted and
becomes effective on or before January 1, 2000, in which case certain
provisions of AB 1050 would prevail over provisions of this bill, as
specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1872.81 is added to the Insurance Code, to
read:
   1872.81.  (a) In addition to the fee imposed pursuant to Section
1872.8, each insurer doing business in this state shall pay to the
commissioner an annual fee of thirty cents ($0.30) for each vehicle
insured under an insurance policy it issues in this state, for
expenditure as follows:
   (1) An amount equivalent to twenty cents ($0.20) of the fee
imposed per insured vehicle by this section shall be used for the
purpose of paying for consumer service functions of the department
that are related to automobile insurance.  The revenues under this
subdivision shall be used to improve service to consumers through the
rating and underwriting services bureau, the claims services bureau,
the investigations bureau, or any successor bureaus of the
department that may assume the consumer service functions of these
bureaus.  It is the intent of the Legislature that the highest
priority for use of these revenues during the 1999-00 and 2000-01
fiscal years shall be to eliminate the backlog of consumer complaints
relative to automobile insurance policies, insurers selling
automobile policies, and agents and brokers selling those policies.
The department shall develop a plan for the use of the revenues
available under this subdivision for the purposes authorized, and
shall submit the plan to the Assembly and Senate Committees on
Insurance.
   (2) An amount equivalent to ten cents ($0.10) of the fee imposed
per insured vehicle by this section shall be used for the purpose of
improving consumer functions of the department related to automobile
insurance.  Revenues available under this subdivision shall be used
to improve consumer functions through one or more of the following:
(A) the rating and underwriting services  bureau, (B) the claims
services bureau, (C) the investigations bureau, and (D) any successor
bureau of the department that may assume automobile insurance
consumer functions of these bureaus.  These revenues may also be used
for improving the ability of the department to respond to consumer
complaints and information requests through the department's
toll-free telephone number, and for improving the ability of the
department to offer information about automobile insurance rates to
the public.  The department shall develop a plan for the use of the
revenues available under this subdivision for the purpose authorized,
and shall submit the plan to the Assembly and Senate Committees on
Insurance.
   (b) This section shall remain in effect only until January 1,
2007, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2007, deletes or extends
that date.
  SEC. 2.  Section 1874.8 is added to the Insurance Code, to read:
   1874.8.  (a) Each insurer doing business in this state shall pay
an annual fee to be determined by the commissioner, but not to exceed
fifty cents ($0.50) annually for each vehicle insured under an
insurance policy it issues in this state, in order to fund the Bureau
of Fraudulent Claims and an Organized Automobile Fraud Activity
Interdiction Program.
   (b) This section shall remain in effect only until January 1,
2007, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2007, deletes or extends
that date.
  SEC. 3.  Section 12978 of the Insurance Code is amended to read:
   12978.  Notwithstanding any other provision of law, the
commissioner may increase or decrease the fees set forth in this code
as necessary to allow the department to meet the appropriation
authorized by the annual Budget Act.  However, any increase or
decrease so made shall be made only in accordance with this section,
and a fee increase shall not exceed 10 percent without the prior
approval of the Legislature.
   A single annual increase or decrease in fees, on a fiscal year
basis, may be made by the department at any time during the year
provided it is announced by bulletin issued at least 90 days prior to
the effective date of that increase or decrease.  The bulletin shall
be sent to all affected parties and to both houses of the
Legislature.  That fee increase or decrease may be rescinded by a
majority vote of both houses of the Legislature not later than 60
days after the issuance of the bulletin announcing the increase or
decrease.
   In the event the bulletin is issued during the period between
August 1 and December 1 of any year, the department shall provide
notice in writing of the necessity of any fee increase or decrease as
proposed in the bulletin upon issuance of the bulletin to the
chairperson of the committee in each house which considers
appropriations and the Chairperson of the Joint Legislative Budget
Committee.
   If written notice is provided to the commissioner within 60 days
of the issuance of the bulletin announcing the increase or decrease
by any of the chairpersons that there is an objection to the fee
increase or decrease, the increase or decrease shall take effect
February 1 of the following year unless rescinded by a majority vote
of both houses of the Legislature by that date, rather than 60 days
after issuance of the bulletin.
   The department shall annually project forward its workload for the
subsequent three years in order to project appropriate fee levels,
and shall annually make adjustments to those fees, if necessary,
based on actual workload experience.
   The limit on the cumulative amount that the fees may be increased
or decreased shall be the amount necessary to provide sufficient
moneys to carry out the projected workload within the appropriations
contained in the Governor's Budget for the next succeeding fiscal
year, or, to the extent that moneys received or projected to be
received by the department are insufficient to carry out the
projected workload within the appropriation authorized by the annual
Budget Act during the then current fiscal year, an amount necessary
to meet that appropriation and consistent with that projected
workload.
  SEC. 4.  This act shall become operative only if Assembly Bill 1050
of the 1999-2000 Regular Session is enacted and becomes effective on
or before January 1, 2000, in which case Section 1874.8 of the
Insurance Code, as added by Assembly Bill 1050 of the 1999-2000
Regular Session, shall prevail to the extent that it provides for the
allocation and distribution of funds under the program established
to target organized automobile fraud activity.
